World’s second-largest diamond discovered

A diamond the size of a tennis ball has been recovered from a mine in Botswana. The incredible 1,111-carat stone is the biggest ever to be found in the country, and the largest discovered anywhere in the world since 1905.

The BBC reported that it has become the second-largest diamond discovered in the world. The largest was the 3,106-carat Cullian diamond found in South Africa in 1905. That one was cut into nine stones, and some of them are set in the Crown Jewels.

It’s not known what this new stone is worth, because according to the Guardian, it’s too big to be weighed by equipment at the mine, and will have to be flown to Antwerp. However, estimates have put its value anywhere between $35 million and $80 million.

What next?

The diamond will then have to be cut and polished, and it remains to be seen how it copes with the process – and whether it can remain one big diamond or will need to be cut into several smaller stones. Even if it is broken up, there’s still a good chance it will produce the world’s largest cut diamond.

Given that a flawless 100-carat diamond was sold for £14.8m (AUD $31.6m) in April, it’s no wonder the mine owners are getting excited.

Prices for record-breakingly large and pure diamonds remain buoyant – last week alone the Blue Moon diamond sold for £32 million, and a vivid pink diamond for £19 million.

Meanwhile, more generally, diamond prices are in the doldrums, and have fallen more than 12% over the past five years. The problem stems largely from a collapse of demand during the financial crisis. This has been amplified in China (the second-largest market for diamonds) by a crackdown on corruption, which stopped the giving of luxury items as corporate gifts.

Irritatingly for consumers, bad news for the industry is not necessarily good news for anyone in the market for a diamond. The falling price of diamonds and precious metals doesn’t necessarily translate into a drop in the price of the finished goods. Much of the industry is driven by limiting supply in order to manipulate prices. Miners are sitting on huge stockpiles of diamonds that they won’t release until prices recover, so there won’t be a sudden glut of affordable diamonds hitting the shops for Christmas.